5 Crucial Things if You are Selling in 2023
We asked for confidence-building advice from a couple of mortgage lenders: Manny Delgadillo, manager of the Wells Fargo Home Mortgage Center in Los Angeles, and Evan Geiselhart, president of Midwest Home Trust Mortgage in Schaumburg, Ill. They described how to bypass some of the mortgage mistakes they’re seeing.
Of the top six cities to have lost value, year over year, five of them are in California. But that’s not the whole story.
The softening of the market is on the heels of a sharp increase in real estate costs. Nationwide, the average median home value rose 17% between 2019 and 2021, according to data from the 2021 and 2019 American Community Surveys from the U.S. Census Bureau. In the spring and summer of 2022, prices rose sharply again. The softening prices at the end of 2022, do not take us back to 2019 or even 2020.
If you’ve owned your house for more than three years, chances are your home value has grown. Inventory is incredibly tight and a house in good condition, and presented well, can still get multiple offers.
1. VERY LOW INVENTORY CAN MEAN STRONG OFFERS
The market is more balanced between buyers and sellers now, but there are still frequent multiple offers. East Bay Homeowners
have every reason to believe they will get a good price, and that offers will come quickly.
2. HOUSES THAT NEED EXTENSIVE WORK SIT LONGER
With cash tight after the rise in prices for food, fuel, etc, buyers are less open to buying a house that needs work. Making
the house move-in ready is important when trying to get top-end offers.
When working with my clients to prepare their homes for sale the Compass Concierge program can make a huge difference. The
program provides funds up front for the homeowner to address issues, get an inspection and even pay for moving costs and
staging. There is a nominal fee and no interest at all. Funds are repaid at close of escrow.
3. LOOKS MATTER – STAGING MATTERS
Beyond repairs, a home that looks updated and clean attracts more attention. Staging has an impact on both the number of offers
and the price point. Homes that are staged typically sell faster and for a higher price.
Think about it this way, if packaging didn’t impact sale prices, companies from cosmetics to electronics would not spend as
much as they do on packaging.
4. PRICING STRATEGIES ADAPT TO THE MARKET
The Bay Area traditionally prices low. Buyers so much expect the underpricing, that a home priced at market value can be
considered “overpriced”. This impacts how willing buyers are to even make an offer. As prices have softened sellers need to be
ready that there may be just one offer on their house. Pricing closer to market value may be wiser until the market perks up in
late spring.
5. ASSUMABLE LOANS IN A HIGH-RATE ENVIRONMENT
VA and FHA Loans are often assumable. Those loans, taken when rates were very low, can be assumed by a qualified buyer. That
would make a house essentially less expensive for the buyer, and therefore much more attractive.
For example, Sellers have a house valued at $750,000.
Buyers bring in $150,000 but would have to take a loan at today’s rates for the balance, at somewhere between 6 and 7%.
But what if Sellers have an assumable mortgage of $400,000 at $3.25%?
Now the Buyers bring in the same $150,000, but they also assume the loan for $400,000 at 3.25%. They can get a second loan, which
would be at current rates, but for only $200,000. Their monthly payment would be lower than if the entire loan had been at a
higher rate.
If you are not sure if your loan is assumable, give me a call and together we will determine if you can use your loan to your
advantage when selling your house.
Considering selling your home?
Come and learn how to plan a successful sale. See our seminar offerings below.
The seminar will be held at Uchi in Berkeley, a store for well-crafted, sustainable teak furniture and artisan goods for the modern home. It’s a great space.
Women Buying Properties
A Home Buying Seminar
HYBRID – Both in-person and online
Thursday, April 13th at 5:30 PM
Alameda Compass office at 1414 Park Avenue
Register here.
Preparing your Home to Sell
In-person Home Selling Seminar
On the Process of Selling a Home with Ease, at the Best Price
Thursday, April 20th at 5:30 PM
Uchi 1325, San Pablo, Berkeley
Register here.
Investing 201: Investing Overseas
Thursday, April 20th at 5:30 PM
Uchi 1325, San Pablo, Berkeley
Register here.